China Showcases Its Economic Wisdom at Davos
With evidence suggesting a likely global recession this year, the case against protectionism and unilateralism is clear: It is in the interest of China and the world at large.
Chinese Vice Premier Liu He delivered a special address on Jan. 17 at the 2023 World Economic Forum meeting in Davos, Switzerland, building on the strengths of China’s resilient economic growth to give meaningful cooperation concrete shape. His proposal to strengthen global cooperation underlines Beijing’s resolve to uphold the “Davos Spirit.” It compels the world to challenge an air of fragmentation that has kept all-out cooperation on the margins. “We have experienced all kinds of unexpected events, and witnessed profound changes in the world’s political and economic landscape. Therefore, the theme of this year’s Annual Meeting, ‘Cooperation in a Fragmented World,’ cannot be more relevant,” Liu said.
Governments, civil societies and businesses the world over ought to take note: China’s hard-won success in balancing a resilient economy with dynamic COVID-19 adjustments presents enormous possibilities for accelerated “re-globalization.”
Liu’s focus on promoting “positive-sum games” among nations is a global call to identify and converge on new areas of cooperation in 2023. A proof point is Beijing’s close embrace of economic development as the “primary and central task.” From the Arab world to Africa, China has joined with regional partners to bridge future development gaps and incentivize open, inclusive and truly innovative economic progress. Such “positive-sum games” are worth recalling at present, given how major leaders at Davos are keen to address intersecting development challenges, from food, energy and climate insecurity to dwindling trade and investments.
China’s 3% GDP growth over the past year, and its emphasis on job and price stability serve as a message of reassurance for the global economy as it looks toward 2023. Over the past decade, China’s GDP has grown from 54 trillion to 121 trillion yuan ($17.9 trillion), a result of recognizing global risks, and optimizing policy choices within those constraints. That is an exercise in pragmatic decision-making that is lost on select Western economies at present. Still, Liu’s attention to China’s growth transition and global challenges provides an opening for all states to converge on global recovery as recession risks loom large.
Given positive economic interdependencies between Beijing and major trading powers, “significant improvement” of the Chinese economy this year can deliver tangible gains. Look no further than the observations of top financial officials at the WEF, who viewed China’s re-opening and flexible COVID-19 controls as critical in spurring global growth and avoiding a broader recession. Such a positive growth contribution is a pivotal consideration for scores of developing world economies that have faced disproportionate exposure to recession risks, trade cuts, and pandemic-induced spending shortages. Thus, China’s willingness to open up for the benefit of win-win cooperation is a profound pursuit, one that is sensitive to the need for equal, harmonized and high-quality recovery of all economies without exception.
Unlike the West’s preoccupation with zero-sum conflicts, counterproductive defense spending, and divisive investment proposals, Beijing’s case at Davos put no ideological clothing on achieving “world economic stability and development.”
“We must open up wider and make it work better. We oppose unilateralism and protectionism, and look forward to strengthening international cooperation with all countries for … the promotion of economic re-globalization,” affirmed Liu. With evidence suggesting a likely global recession this year, the case against protectionism and unilateralism is clear: It is in the interest of China and the world at large.
Finally, resilience is an apt term to sum up China’s calculated approach to expanding growth this year. At the same time, resilient economic planning and multisector reform have characterized China’s prudent decision-making process over the past years. For instance, recurring economic and financial risks worldwide did not prevent Beijing from focusing its energies where they matter the most: reforming state-owned enterprises, attracting foreign investment, and resolutely promoting “fair competition, anti-monopoly and entrepreneurship” within and beyond its borders.
These should be seen as important considerations at Davos because pragmatic resource allocation and a quest for overall financial stability have afforded China a vantage point for growth at the start of this year. As Liu’s address makes abundantly certain, the goal is to challenge the perils of fragmentation in modern-day engagement, provide inspiring lessons from China’s fight against financial risks and macroeconomic downturns, and use economic expansion to put the “globe” back into global cooperation.
Hannan R. Hussain is a foreign affairs commentator, author and recipient of the Fulbright Award.